In the Tax Tip 2024-58, the IRS gave details about the Employer-Provided Childcare Tax Credit of up to $150k to offset 10% of qualified childcare resource and referral costs and 25% of qualified childcare facility costs. To claim the credit, the employer will have to complete Form 8882 Credit for Employer-Provided Childcare Facilities and Services
To be eligible for the credit, an employer must have paid or incurred qualified childcare costs during the tax year to provide childcare services to employees.
Qualified childcare costs are:
- Costs associated with acquiring, constructing, rehabilitating or expanding property used as the taxpayer’s qualified childcare facility.
- Operating expenses paid by the business, including amounts paid to support childcare workers through training, scholarship programs and providing increased compensation to employees with higher levels of childcare training.
- Qualified resource and referral costs which include amounts paid or incurred under a contract with a qualified childcare facility to provide childcare services to employees of the taxpayer.
If you are considering a childcare facility for your employees, claim this credit if you meet the requirements.
Link IRS – Businesses: The Employer-Provided Childcare Tax Credit is worth up to $150,000
